NORTH SYRACUSE CENTRAL SCHOOL DISTRICT. Fund Balance & Budget Assumptions December 3, 2018

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1 NORTH SYRACUSE CENTRAL SCHOOL DISTRICT Fund Balance & Budget Assumptions December 3,

2 AGENDA Fund Balance Reserves Economic Factors Revenue Assumptions Expenditure Assumptions Budget Timeline

3 UNASSIGNED FUND BALANCE (The District s Savings Account ) Unassigned Fund Balance at 6/30/18 (3.97% of Budget) $6,484,003 Estimated Favorable Variance in Revenues $2,235,295 (1) Estimated Variance in Expenditures $ 0 Estimated Unassigned Fund Balance 6/30/19 $8,719,298 Budget for : $163,200,980 Percentage of Budget: 5.34% (2) 1. NYS Refund of Final Cost Report Penalty 2. NYS recommends 4% maximum 3

4 RESERVES FORECAST June 30, 2019 June 30, 2018 June 30, 2019 Tax Certiorari $2,004,739 $2,009,739 Workers Compensation $2,111,669 $2,116,669 General Liability $1,002,301 $1,007,301 Debt Service $1,850,626 $1,550,626 Capital Reserve $2,503,085 $2,504,585 Total $9,472,420 $9,188,920 4

5 ECONOMIC FACTORS Consumer Price Index (% Change) Local Economy (Business Activity) Unemployment Population changes and impact on enrollment 5

6 CONSUMER PRICE INDEX (CPI) The growth in annual tax levy is limited to the lesser of 2 percent or the Consumer Price Index (CPI), subject to certain limited exceptions and adjustments. For the purposes of the cap, the applicable CPI is the Unadjusted - All Items Consumer Price Index for All Urban Consumers (CPI-U). The CPI-U is released on a monthly basis. School districts use the CPI-U through December which is released in the middle of January. 6

7 CPI U PERCENTAGE CHANGE Month 12 Month January February March April May June July August September October November December The change in CPI-U for 2017 used for budget was 2.13%

8 LOCAL ECONOMY/BUSINESS ACTIVITY The local economy impacts unemployment, enrollment and the growth or decline in our tax base. Consistent with the national and state economy, the CNY economy has improved dramatically over the past 5 years. We continue to see meaningful new housing development in the northern portion of our district. We have a significant amount of rental property including apartment complexes which encourage new entrants to the district. Tax Certiorari cases, whereby business owners request that their property assessments be reduced, are regularly presented to the towns. 8

9 UNEMPLOYMENT RATE Syracuse, NY Metropolitan Year Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Annual Ave % 6.20% 5.60% 4.90% 4.10% 4.40% 4.30% 4.10% 3.70% % 5.70% 4.90% 4.70% 4.60% 5.00% 5.00% 4.80% 4.80% 4.60% 5.00% 5.20% 4.60% % 5.50% 5.20% 4.70% 4.40% 4.70% 4.90% 4.70% 4.90% 4.60% 4.60% 5.00% 4.90% % 6.40% 5.90% 5.40% 5.50% 5.50% 5.40% 4.90% 5.00% 4.60% 4.80% 4.90% 5.40% % 7.20% 6.80% 5.80% 5.90% 6.00% 6.10% 5.80% 5.60% 5.30% 5.50% 5.50% 6.10% % 8.80% 8.00% 7.40% 7.20% 7.50% 7.40% 7.00% 7.00% 6.70% 6.50% 6.50% 7.40% % 9.60% 9.10% 8.30% 8.40% 8.70% 8.70% 8.20% 8.00% 7.70% 7.50% 8.10% 8.50% Unemployment rate at 18 year low 9

10 UNEMPLOYMENT

11 Although enrollment continues to decline, the percentage of students who are either economically disadvantaged or disabled continues to increase. 11

12 At some point enrollment should level off due to the size of the district and amount of real estate development. 12

13 REVENUE ASSUMPTIONS General State Aid: Despite the positive general economic conditions and pressure to address the Foundation Aid issue, we are concerned that the NYS budget deficit may result in lower aid to schools. The election is over. Real Property Taxes: The increase in the tax levy will be limited by the tax cap calculation. The largest component is inflation based on CPI as reported by the Bureau of Labor Statistics. Looks like CPI will be at or above 2% for Therefore, our tax increase will be based on 2%. Building Aid: Education law requires the Commissioner to revise the assumed amortization schedule for remaining debt service payments for outstanding principal and interest at the end of each 10-year segment of an assumed amortization for Building Aid if the current interest rate is at least one quarter percent (.25) lower than the original interest rate for the assumed amortization. Smart Schools Bond Act: Although this program continues to be funded, revenues will NOT impact the General Fund.

14 FOUNDATION AID Funding Shortfall The Laws of 2007 reformed the State s method of allocating resources to school districts by consolidating some thirty existing aid programs into a Foundation Aid formula. This formula distributes funds to school districts based on the cost of providing a sound basic education and adjusted to reflect regional costs. The Enacted Budget also included a four-year phase in of Foundation Aid. The Enacted Budget extended the phase in to and froze and payable Foundation Aid to Foundation Aid. The Enacted Budget extended the phase in to The promised phase in has not happened. 14

15 Foundation Aid Campaign for Fiscal Equity Law Suit ($154 Million Short) Enacted State Budget/School Year Current Year Aid Full Phase-in Level Shortfall $38,127,395 $51,905,964 ($13,778,569) $42,285,090 $54,710,908 ($12,425,818) $42,317,268 $59,749,290 ($17,432,022) $42,317,268 $59,606,170 ($17,288,902) $42,317,268 $56,889,215 ($14,571,947) $42,579,693 $57,754,076 ($15,174,383) $42,699,660 $59,296,055 ($16,596,395) $43,178,688 $53,814,000 ($10,635,312) $43,324,523 $52,716,600 ($9,392,077) $43,747,558 $53,135,617 ($9,388,059) $44,998,315 $53,278,729 ($8,280,414) $45,948,242 $55,184,283 ($9,236,041) 15

16 Health Benefits: We are hopeful that the positive trend continues and that NSCSD will experience lower than average increases. Retirement Costs: TRS Our current rate is 10.62%. The actuary recommended a decrease from 10.62% to between 8.5% and 9.5%. ERS - The 2019 contribution rate for the Employee Retirement System (ERS) will be slightly less, going from 15.8% to 15.7% of salaries. The rate will be 15.7% for 2020 as well. Salaries & Wages: Many contracts will expire June 30, Contractual terms are not known at this time. Fuel Costs (Transportation): Over the past few years this has been a favorable (but volatile) market. However, we must consider net of aid savings only due to transportation aid (78%). Energy Costs (Gas & Electric): BOCES: EXPENDITURE ASSUMPTIONS Through BOCES, the district participates in an energy consortium (NYSMEC) that enters into a 3- year supply agreement. The current agreement covers through school years. Our budget will reflect contracted rates based on estimated usage. Continue to evaluate opportunities to control costs through BOCES services.

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18 BUDGET PROCESS TIMELINE October 1 st BOE Approval of Budget Calendar November 12 th February 22 nd Principals, Directors & Cabinet and BOE subcommittee develop initial budget December 3 th - Board of Education Budget Assumptions December 17 th Board of Education Budget Process Overview & Status January 28 th Board of Education Governor s Budget proposal Preliminary Tax Cap Calculation Fund Balance & Reserve Projections March 18 th Board of Education Budget Update Final Tax Cap Approve Bus Bond Proposition Approve Notice of Budget Hearing/Election April 1 st Proposed Budget Presentation Budget Discussion & Deliberation BOE Adoption of Budget April 22 nd BOCES Election and Budget Vote May 7 th Budget Hearing February 25 th Board of Education Initial Budget May 21 st Budget Vote 18